Foreigners doing business in Japan

Basic Concepts in Establishing a Company in Japan:

Once establishing a company in Japan, it can operate as a normal Japanese company.

Even foreign corporations can hold 100% equity in companies they establish.

The board of directors must be individuals, not corporations.

One board of director must have a permanent address in Japan

In order for an officer to stay in Japan he must have an “Investment and Management” residency status.

Another method is to simply set up branches in Japan.

You need to have a representative with a permanent address in Japan and the branch must be registered, however, the cost is much less.

Unfavorable taxation, due to being taxed in Japan depending on the size of the parent company in its home country. Taxation according to the capital of the parent company can be set.
Furthermore, the branch is unable to remit principle to the parent company as an expense.

On a short term basis a branch may be useful, however, in the long run it is wiser to establish a Japanese corporation.

For example, it is impossible for a travel agency to obtain a license without setting up a company or subsidiary in Japan.

For a construction company, in order to operate in Japan it must set a permanent establishment and, notify the tax authorities by appointing a person with residence in Japan. Not only for the construction industry, also as with manufacturing, transporting, and storage.

Another option is to appoint a law firm to handle business matters instead of establishing a permanent establishment.